Co-generation plans of 15 sugar co-ops cleared

The proposed plants in Maharashtra would generate around 75 Mw of power.

The Maharashtra government has cleared proposals of 15 sugar cooperatives to start co-generation plants, which would generate around 75 Mw of power.

The sugar industry in the state is going through one of the worst financial crises. While between 2002 and 2005, owing to drought in major parts of the state, sugarcane was in short supply, there has been a glut since late 2006, thanks to abundant rainfall.

To overcome this, experts had suggested that the industry undertake ethanol production and go for co-generation, which would create an alternative source of income for the sugar cooperatives.

However, as the financial condition of the 140-odd sugar co-operative was not sound, they were unable to secure funding for the co-generation projects.

Though the then state government floated a fund ""Urjankur Nidhi "" along with private players for the promotion of renewable energy, sugar co-operatives did not avail of the assistance due to the conditions put up by the fund managers.

Finally, last year the state and central governments came up with another scheme. Under this, the sugar cooperatives had to contribute 5 per cent of the total project cost as their equity for the project, 5 per cent will be provided by the state government as grant, 30 per cent of the project cost can be raised as a loan through the Centre's sugar development fund (SDF), which is available at 4 per cent rate of interest, and rest should be raised by the sugar cooperatives through financial institutions for which the state government would stand guarantee.

The scheme has evoked a good response and so far proposals of 15 sugar cooperatives have been cleared by the state government and many more are in the pipeline, said Prakash Naiknavare, managing director of the Maharashtra State Sugar Cooperatives Federation Ltd.